Self Managed DMP and First House Purchase

adviceseeker77

Hello
I have gone through many threads but have been unable to find an answer to my question.

I am 30k in long term persistent debt with payments of 850 a month on a 29k income. It is only over three lenders. Basically I am being crippled by my debts without enough money for food or heating.

So far I have not missed a payment but this is the first month I will not meet my council payment so urgent action is needed.

I am unable to put money away for a house deposit due to the debt payments. My thought process is to stop paying my debts and let them default and in the 6-7 years it takes for the credit file to clear I will have a decent deposit for a house purchase and a clear credit file for a mortgage.

My question is how are the debts that have been sold on, registered on my credit file by the company they are sold to. Will these be showing on my credit file for longer than the 6 years if I am only able to make minimum payments to the collection agencies, even once the main lender debt is defaulted? If I am ever able to make F&F settlements, will these debt collection agencies still be showing on my credit report and risk a mortgage application. 

Basically I am looking at the flaws in my plan of having a reset, and being ready to purchase my first home in 6-7 years. I also have affordability complaints in.

Thank you

ManyWays

First, you have to take action now and cancel payments to the debts, dont miss a council tax payment to stretch to make them, get out of this spiral of debt now. Councils are faster to go to court and send round bailiffs, which add on huge charges, than any other sorts of debt.

Will these be showing on my credit file for longer than the 6 years if I am only able to make minimum payments to the collection agencies, even once the main lender debt is defaulted? If I am ever able to make F&F settlements, will these debt collection agencies still be showing on my credit report and risk a mortgage application. 
The good news is that they wont, a debt purchaser has to use the same default date the original lender did.
However the bad news is that a mortgage lender will also check your last 3-6 months bank statements and see the payments you are making to these old defulated debts. Mortgage lenders dont actually care about your credit score at all, but hey do care about defaulted debts that havent been settled.

So your plan needs to include settling all the debts with settlement offers. Then 6 months after the last one has gone, if they arent on your credit report either, no mortgage lender will know about them (unless of course you defaulted to that lender originally!)

adviceseeker77

ManyWays said:

First, you have to take action now and cancel payments to the debts, dont miss a council tax payment to stretch to make them, get out of this spiral of debt now. Councils are faster to go to court and send round bailiffs, which add on huge charges, than any other sorts of debt.

Will these be showing on my credit file for longer than the 6 years if I am only able to make minimum payments to the collection agencies, even once the main lender debt is defaulted? If I am ever able to make F&F settlements, will these debt collection agencies still be showing on my credit report and risk a mortgage application. 
The good news is that they wont, a debt purchaser has to use the same default date the original lender did.
However the bad news is that a mortgage lender will also check your last 3-6 months bank statements and see the payments you are making to these old defulated debts. Mortgage lenders dont actually care about your credit score at all, but hey do care about defaulted debts that havent been settled.

So your plan needs to include settling all the debts with settlement offers. Then 6 months after the last one has gone, if they arent on your credit report either, no mortgage lender will know about them (unless of course you defaulted to that lender originally!)

Thank you for such a complete answer. I am on track for a payrise in the next few months, which should enable me to put some money aside for settlements/deposit. I guess I will just need to balance the pot carefully,